"I think we have to recognise that the overriding strategic framework in which Pakistan thinks of itself is its relationship with India," she told the Senate Foreign Relations Committee on Thursday during a hearing on Afghanistan and Pakistan.
"Every time we make a move toward improving our relationship with India... the Pakistanis find that creates a lot of cognitive dissonance," Clinton said noting, "So are you our friend or are you their friend? It's all a zero-sum game to them (Pakistanis)."
Pakistan, she said "wants to be sure that whatever happens in Afghanistan will not affect its strategic interests. So it has in the past invested in a certain amount of instability in Afghanistan" as it also does not want Afghanistan to become a satellite of India.
"India and Afghanistan have a historical affinity. And historically, Afghanistan has supported elements within Afghanistan, which Pakistan has seen as inimical to its own interests," she said.
"So if Pakistan could be assured that what would be left would be favourable to and even, in their view, subservient to Pakistani interests, that would be fine with them," Clinton said.
But "the Indians aren't going to sit around and accept that. The Uzbeks and the Tajiks are not going to sit around and just accept that".
The top US diplomat said Washington "was working very hard on our strategic partnership with India", which looks at Pakistan and "believes that their continuing support for elements of insurgency against India in Kashmir and across the border into India proper makes it very difficult for them to know what path to choose".
However, Clinton said, she was encouraged by the cricket diplomacy between Indian Prime Minister Manmohan Singh and his Pakistani counterpart Yusf Raza Gilani and the resumption of talks that had broken off in 2008.
"And we have certainly urged both sides to go as far as they could to build more confidence and to try to be able to develop an atmosphere of greater cooperation," she said.